OK - let's begin our discussion of mortgage fraud.
One of the more popular types of mortgage fraud, and certainly the one that brought about the most notoriety during the bust years of the late 2000's in the States is predatory lending.
The basic definition of predatory lending is where lenders (banks, etc.) make loans with illegally high interest rates or fees to uninformed or unqualified borrowers. The borrower is taking out a loan that he does not undestand and cannot repay. Note that this is a subset of what is known as a "subprime loan" which is another topic altogether. Subprime loans are not in and of themselves illegal or predatory. Subprime loans become predatory when they include exhorbinately high interest rates, excessive fees or transaction costs, inappropriate penalties and other types of inexcusable ways to make money.
One of the more popular types of mortgage fraud, and certainly the one that brought about the most notoriety during the bust years of the late 2000's in the States is predatory lending.
The basic definition of predatory lending is where lenders (banks, etc.) make loans with illegally high interest rates or fees to uninformed or unqualified borrowers. The borrower is taking out a loan that he does not undestand and cannot repay. Note that this is a subset of what is known as a "subprime loan" which is another topic altogether. Subprime loans are not in and of themselves illegal or predatory. Subprime loans become predatory when they include exhorbinately high interest rates, excessive fees or transaction costs, inappropriate penalties and other types of inexcusable ways to make money.
NOTE: THE INFORMATION IN THIS BLOG IS NOT LEGAL ADVICE NOR
IS IT INTENDED TO BE LEGAL ADVICE. IF
THE READER HAS ANY LEGAL QUESTIONS, PLEASE REFER TO AN ATTORNEY.
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tausk
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